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Wells Fargo keeps CRH Overweight amid construction-materials cost pressure
Wells Fargo cut its CRH price target to $132 from $135, citing lagging pricing versus higher energy costs and softer government spending.
Wells Fargo said it still prefers CRH (CRH) despite pressure building across construction materials, lowering its price target to $132 from $135 while keeping an Overweight rating ahead of the sector's second-quarter earnings.
The firm warned that results could be weighed by higher energy costs, with pricing actions not keeping pace with input cost inflation, and it also pointed to concerns that potentially slower government spending could hurt the broader industry outlook.
Even with those near-term headwinds, Wells Fargo named CRH its top pick in the sector, highlighting the company’s planned acquisition of Arcosa’s construction materials assets and what it views as an attractive valuation relative to growth prospects.
Separately, Jefferies raised its CRH price target to $165.60 from $149 and said the Arcosa transaction could add an estimated 5% to 6% upside to CRH’s earnings-per-share forecasts starting in 2027 once fully integrated, underscoring its view of CRH’s growth mix of organic expansion and strategic acquisitions.